With Italian prosecutors heading for criminal charges in the Parmalat case within days, Deloitte & Touche said that two partners facing charges in Milan had declined an opportunity to appear before the prosecutors on Tuesday.
In a statement, Deloitte indicated that it expected charges would be filed against the partners, who supervised its Parmalat audits, although it insisted that the partners had done nothing wrong, and the firm took credit for asking questions that led to exposure of the fraud.
The charges, expected to be filed before March 19, are to involve 25 people, including auditors from the former Italian affiliate of Grant Thornton, which audited Parmalat until 1999, when Deloitte took over. After 1999, Grant Thornton audited the subsidiaries where the fraud was concentrated, and Deloitte has said it relied on those audits to carry out its own.
The others expected to be charged include Parmalat's former lawyer, Gian Paolo Zini, and former executives of Parmalat, as well as former board members and people involved in its internal audits. No bankers are expected to be named in the charges filed by prosecutors in Milan.
Deloitte said that it was notified of the charges on Friday, and that its two partners, Adolfo Mamoli, who handled Parmalat's audits from 1999 through the end of 2002, and Giuseppe Rovelli, who replaced him, were offered the chance to meet with prosecutors on Tuesday.
But the partners were not given sufficient information on the nature of the documents being used by prosecutors in the interviews, which Deloitte said involved “140 types of documents” and came to tens of thousands of pages.
Instead, Deloitte said that it submitted detailed memorandums arguing that the partners had not improperly influenced Parmalat's stock price and were not “associated with false communications made by other parties now under investigation.”
It also said there was “no basis for the allegation that they obstructed the work of Consob,” the Italian stock market regulator, beginning in July 2003. The audit firm said that the information it provided then was right to the best of its knowledge at the time, though much of it turned out to be false.
Deloitte said that the charges were being brought under a “fast-track” procedure in Italian law, and that use of that procedure was better suited to far simpler cases and “will not provide the partners sufficient opportunity to defend themselves at this stage of the proceedings.”